Notes on Amazon’s Q2 2020 Investor Updates

eCommerce
Written By Rick Watson

Amazon: Jeff Bezos is here for two reasons: chew bubble gum and kick ass. And he's all out of bubble gum. No longer is he sipping rose' on billionaire yachts.

A few notes from Amazon's recent investor releases.

  • You may have heard Jeff said he would give up all his profits to pay for this crisis. Including telling investors to "take a seat." Not only is your margin his opportunity, but his margin, as well.

  • Jeff has always been brilliant at managing investor expectations regarding the company, in my opinion, and this continues. They will spend $4B+ on COVID-related expenses.

  • Amazon's CFO on the earnings call said that it was taking longer for items to get into their warehouse than to get out of their warehouses, which explains the FBA category restrictions and delays there. It seems like the significant restriction right now, more than the outbound times, their CFO mentioned. Replenishment!

Marketing spend decreased in the short-term.

1-day shipping costs were supposed to be $1B in Q1, and the actual costs were about in line with that. Most of those costs are in infrastructure and network improvements. Things like: Inventory closer to the customer, building up Amazon logistics network, and multiple pull and ship-times during the day.

Rick Watson

Rick Watson founded RMW Commerce Consulting after spending 20+ years as a technology entrepreneur and operator exclusively in the eCommerce industry with companies like ChannelAdvisor, BarnesandNoble.com, Merchantry, and Pitney Bowes.

Watson’s work today is centered on supporting investors and management teams incubating and growing direct-to-consumer businesses. Most recently, in partnership with WHP Global, Rick was a critical resource in architecting the WHP+ platform, a new turnkey direct to consumer digital e-commerce platform that powers AnneKlein.com and JosephAbboud.com.

Watson also hosts a weekly podcast, Watson Weekly, where he shares an unbiased, unfiltered expert take on the retail sector’s biggest players.

In the past year alone, Rick has spoken at many in-person and virtual events as well as podcasts on topics ranging from retail/ecom to supply chain/logistics and even digital grocery including CommerceNext IRL, ASCM Connect, and Retail Innovation Conference.

https://www.rmwcommerce.com/
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